Chisholm: Bond Issue Key To Rate Increase

January 16, 1986|By Katherine Long of The Sentinel Staff

ST. CLOUD — The city's electric utility customers can expect an increase in their rates, but by how much depends on which way the city goes on a bond issue, St. Cloud Chamber of Commerce members were told Wednesday.

City Manager Jim Chisholm outlined the problems and explained the work needed to upgrade the city's 50-year-old electric utility system.

The city is planning to make improvements and issue a $20 million bond to pay for it, which is expected to increase utility rates by $14 to $24 a month for 1,000 kilowatts of power.

A decision on the length of the bond, which will determine the rate increase, will be discussed at a council workshop at 7:30 tonight in the city hall auditorium.

Chisholm said the aged system is not as reliable as city officials would like. Summer lightning storms take a particularly severe toll on the system, especially along the power line running north along State Road 15 to Orange County.

The planned improvements include a high-power line connecting the city to a Florida Power Corp. substation in Holopaw, and additional lines and substations to increase system reliability.

Chisholm said the improvements would reduce power losses along the lines, making the system more efficient, which would save money. It also would avoid some of the switching charges the city pays to Kissimmee Utility Authority.

Chamber members pointed out that paying off a 10-year bond issue would mean increasing consumer rates by 8.6 percent -- up to $98.83 for 1,000 kilowatts of power. Power rates in November 1982 cost $91 for 1,000 kilowatts.

City data shows that while Kissimmee power rates have increased by 27 percent from November 1982 to October 1985, the city's rates decreased by 16 percent. Kissimmee charged $72 in November 1982 and $91 in October 1985 for use of 1,000 kilowatts. Florida Power Corp. and Orlando Utilities Co. rates also increased by more than 10 percent during that period.